The Anvil that Forged A Future

The story of StartupCity Des Moines

This post is slightly longer and better read in the Substack app/website rather than your email client. Email may cut off before the valuable lessons learned are presented fully.

The first two installments discussed stories of the Global Insurance Accelerator and the New Bohemian Innovation Collaborative. This final installment is a story of wins and losses, euphoria and regrets, experiments and results. I alluded to this story in the Origins section of my Thanksgiving week post and how a chance meeting led to the creation of several components of Central Iowa’s entrepreneurial ecosystem. As with any memoir, this post is derived from my memory and could be inconsistent with others’ as I unravel this thread. Although Mike Colwell’s and Christian Renaud’s review comments are within, I invite others with additions or corrections to place them in the comments for the benefit of history.

Let’s begin with a nod to the shirt designed by Ben Milne that symbolized StartupCity Des Moines’ Lean approach to ecosystem building far and wide

Proof, Java Joes, Amici, Tacopocolypse, Peace Tree, Garlicpalooza

Iowa’s startup community was searching for a home in late 2010. The two years leading up to my lunch meeting at Proof with Mike Colwell and Christian Renaud were filled with efforts to start an entrepreneurial community in downtown Des Moines at coffee shops, restaurants, and music venues.

The OG - Amici Coffee (&coworking)

Long-time (9 months, but a lifetime in this stack’s age) readers will recall the nascent Impromptu Studios community established by Dan Shipton and team. As Impromptu neared its end, others hungered to pick up the mantle and maintain momentum. Christian Renaud, then CEO of Palisade Systems, was already supporting entrepreneurs in the community. He hosted Ben Milne and the nascent Dwolla in Palisade’s office and was dreaming of a larger space for greater creative collisions amongst entrepreneurs to duplicate his experiences at Cisco in Silicon Valley.

The weeks following the lunch are a blur. Christian and I built a blueprint for an incubator, spreadsheet-ed a financial model, forged new friendships (including our own), and begun fund raising. Iowa’s economic development landscape supported our three-year vision, and over the subsequent nine months, we were able to garner funding support from the State of Iowa, City of Des Moines, Polk County, and the Greater Des Moines Partnership (The Partnership) with access to and incredible support from Debi Durham, Terry Vorbrich, county Supervisor E.J. Giovannetti and CEO Martha Willits, respectively.

The organization’s name, Startup City Des Moines (SCDSM) and the logo, a modified anvil, were unveiled on December 9, 2010, forging a new start for our incubator. Our model assumed that participants would contribute a portion of their company’s equity to the incubator, become residents in a shared space, mentor and grow together. A related assumption was that their successful exits via sale/merger would provide new funds to sustain the organization. The Partnership assisted us in securing 10,000 square feet in downtown Des Moines in the Bank of America building.

This section’s header is a nod to the earliest locations and entrepreneurs who contributed to the community through place, food and beverage. Though, sadly, none exist today, the contributions of each were critical in bringing people together, securing their place in this history.

The early years

An essay from Andreesen Horowitz derisively refers to this period as when “ways of working were diffusing out into the world beyond Silicon Valley”. Then, as now, the valley’s elitist feeling was that true technology could only be built in the valley.

However, other ambitious entrepreneurs from elsewhere in the state shared our dream. Amanda Wood and Andy Stoll came from Cedar Rapids and shared their work from eastern Iowa and, more importantly, told us about Startup America, a parallel initiative underway in Washington DC. They motivated us to join forces with Startup America and launch Startup Iowa alongside SCDSM.

Startup America was led by Steve Case of America Online and Scott Case (unrelated) of Priceline. Steve & Scott, in their new careers, envisioned a three-year plan to spur entrepreneurship across America by tapping into states’ strengths in hands those states’ entrepreneur leaders. Andy and Amanda brought a detailed playbook from Nashville where Startup America had helped establish StartupTN.

The SCDSM plan and funding were also a three-year strategy so adopting and adapting StartupTN’s plan for Iowa to connect to a national strategy felt right. Startup IA launched simultaneously with SCDSM’s ribbon cutting in Des Moines with Scott Case, Jay Byers and numerous city and state leaders present. SCDSM’s 10,000 sq ft filled with hundreds from many walks of life. The community was on fire and local print and television media began reporting weekly on its activity.

Eight companies officially joined SCDSM and signed over equity to begin working on their products. They began meeting with mentors and advisors who pushed and prodded, cajoled and inspired the young companies. The space became a “community center” complete with a pool table, wall to wall whiteboards, food and drink. Ideas flowed from residents and guests alike.

Why All the Excitement

Not everyone searches for another job when the economy contracts and layoffs affect livelihood. Some start small businesses and simply stop being employed by others. Others equate business formation risk with employment. Although entrepreneurship, in aggregate, has been declining in the US since the 1970s, partly driven by the necessity of healthcare benefits and increasing wages in low-unemployment states, the pattern of increased entrepreneurship during economic downturns remains true.

Early 2010s in Iowa brought an economy feeling delayed effects of the 2008 financial crisis, the possibility of health insurance availability under Obamacare, the decreasing costs of launching tech-centered businesses with ubiquitous cloud computing, and congressional attention on starting businesses with specific legislation such as the JOBS Act of 2012.

Iowa was an unlikely place for entrepreneurial activity with a twist. Coverage of Iowa’s entrepreneurial activity reached a crescendo as Lynn Hicks and Marco Santana’s voices put startups on the front page of the Des Moines Register’s business page and, on more than one occasion, above the fold of the front page. Kyle Oppenhuizen of the Business Record developed deep stories and brought startups to the paper’s cover originally graced by CEOs and leaders of area corporates. Geoff Wood added written and podcast coverage via his Silicon Prairie News web channel which further attracted attention from traditional and tech-first national outlets. Iowa’s own startup darling, Dwolla, continued to capture national attention which added to the aura of Des Moines as a startup hub.

It is what led Jay Byers, by now CEO of The Partnership, to exclaim that Des Moines was punching way above its weight, and he lent his formidable social media presence and love for Des Moines to the startup community. An entrepreneur and musician himself, he was also ever-present to the community’s need, meeting entrepreneurs, adding their voice to the Partnership’s Washington advocacy on high-skilled immigration, JOBS act, patent reform and much more.

if there is a voice I deeply miss in writing this history, it is Jay’s. He could’ve penned this entire story himself as he lived it from beginning to end with us. Peace, brother; you’re missed

Celebrity sightings

Media and press bring celebrities. In addition to Startup City hosting Ashton Kutcher and Ben Milne for an investor’s perspective on Dwolla, interesting guests appeared in this 10K sq ft space. In May 2012, Brad Feld led one of the most meaningful discussions into the early morning hours. A venerable venture capitalist from Boulder with what was once his seminal work in the Boulder Thesis, Brad had led a session on building entrepreneurial ecosystems at the Thinc Iowa conference that morning. Generous with his time, he’d offered an hour-long fireside chat with ecosystem members over pizza and beer. The hour stretched to two, then four, ultimately ending about nine hours after it started. I, along with many ecosystem leaders can trace our learnings and work methods to those hours.

The Iowa National Guard had just established Kosovo as a sister state and Major Mike Wunn of the Guard requested SCDSM to host and introduce Iowa’s startup ecosystem to the Kosovar President. We were so different from the standard business community that we couldn’t even honor the US Secret Service’s demand for a phone tap - we had no landlines! We subsequently hosted delegations from Ireland and Israel, US Senators and Representatives, the Chief Information Officer of the United States, economic developers from Iowa counties and neighboring states, and hundreds of students from colleges and universities.

All proved to be distractions from our core purpose as you’ll see next.

Why did StartupCity Des Moines exist?

Entrepreneurs.

The distractions, some of our own creation and others a product of recognition beyond our four walls, increased rapidly. We were often asked about our PR agency, our marketing professionals, and our spokespersons pitching to news and media sources. Of course, there were none. All attention was earned media, our blogs, tweets, posts, and the startups talking about the Des Moines ecosystem.

Not all events were PR. Some that impacted the community then and now arose from the days of building, namely, Startup Job Crawl, Startup Weekends, OpenIowa, open coworking, education, and Socratic mentorship.

Startup Job Crawl was an event intended to expose college students from ISU, Iowa, UNI and numerous private colleges to the startup community. Growing startups such as Dwolla pitched themselves to students to offer them a path toward employment at smaller companies here rather than leaving the state for the coasts. Several of those individuals, including Diana Wright, Scott Herren, David Ziemann and more arrived in the job crawl wave, found a home and became engrained in the startup community.

Startup Weekends, a phenomenon that began in Boulder, CO and spread worldwide was already active in Des Moines. StartupCity and its available community space allowed it to grow to over 100 participants for multiple years. Members of the planning community then, including Andrew Kirpalani, Levi Rosol and others remain active and productive members of the broader entrepreneurial, angel investor and mentor community today.

The early 2010s were also a special time in public data when the Obama administration consolidated government data via a single federal data portal. The initiative was led by the first Federal CIO, Vivek Kundra, and spurred the creation of state and local data portals nationwide. Iowa’s initiative, data.iowa.gov under data cazr Scott Vanderhart’s stewardship was already a frontrunner. SCDSM hosted the first statewide open data initiative and solicited entrepreneurial ideas to develop solutions upon public data. Entrepreneurs tested unique ideas such as automatically reporting a pothole when a smartphone detected a bump while in motion in a car. Even the then Lt. Governor Kim Reynolds became involved, spending time with each team late into one evening of the event.

Each such event was an energy producer - invigorating the community, engaging the engineers, designers, dreamers, builders and community supporters.

What Got in the Way

Our core purpose was to deploy the nearly $700,000 in community investment to spur innovation and test viability of a sustainable ecosystem. Christian and I were volunteers. We were paid out-of-pocket expenses and had a future stake from sale of member companies, after the public entities had been paid in full. SCDSM expenses went primarily toward hosting events for the community, rent, utilities and travel when necessary. None of the monies from public entities were used for direct investment in the startups as we focused on connecting our startups to sources of private investments and investors.

Strike 1 - startups need external funding to grow

Another purpose for us was to highlight the successes amongst our cohort of 9 companies, Present.io, Pikuzone, Tikly, Real Estate Fan Pages, Sharewhere, Meidh Corporation, Posterzen, Jobsite Unite, and staffNinja to motivate others building companies in garages, basements and spare bedrooms. SCDSM connected with entrepreneurs in the metro area, to those from Fairfield to Spencer, Council Bluffs to Iowa City, Sioux Center to Pella. Yet, in a state with consistently low unemployment and even lower access to investment capital, the density of startups remained light. As the economy began improving, that density fell further.

Strike 2 - startups feed on energy from more and diverse founders and risk takers

The business model we’d constructed for SCDSM, coupled with the financials necessary for long-term sustainability were increasingly showing stress fractures. By early 2014, we could see the model’s chances of success evaporating and SCDSM’s organic unsustainability.

Strike 3 - startup successes increasingly take 7+ years to achieve

We had other distractions of our own making as well when we encouraged entrepreneurial ventures across food and beverage. Early 2010s saw an introduction of craft beer and we hosted brew-off competitions. We hosted after-parties after the Technology Association’s Prometheus awards with pizza and drink. The adult playground also had food and beverage available anytime day or night and at times it resembled a frat house.

Strike 4 - work and play may mix, but within boundaries

Managing the ever-growing community interaction fell on the shoulders of our two community managers in the three-year existence - Becky Mollenkamp and Danyelle Crowell. Their skills in herding the hundreds of cats, producing blogs and articles, meeting startup and later coworking needs were crucial for our existence. Thankfully, the community manager role has since transformed toward a program manager role, now focused on primarily supporting the startups toward their needs and less the parent.

Strike 5 - even three person organizations require job function clarity

Writing on the Wall

We shared the growing unsustainability of the business model with our funders, investors, community and public that the economic model wasn’t going to be successful. What we saw as failure of the model, however, was seen by many in the community in reverse - a phenomenal success. Having spent nearly $400,000 we had attracted attention at a scale unimagined by traditional PR and marketing campaigns. We were asked to continue through the end.

We declined as our goal was to test the value of an incubator in the middle of the city’s core, one that brought entrepreneurs together, connected them to resources, built a networked ecosystem, and relied upon their success to sustain the entity. Continuation beyond the three years required new sources of funding - whether as a non-profit seeking foundation support or as an entity supported by public funds.

We informed our supporters that we’d initiate an orderly wind-down, selling all assets, and returning all remaining funds to the public entities. There appeared to be no precedent for such a return of public funds. The Partnership came up with a strategy to revert the funds, and a shutdown process began in 2Q2014.

Shutdown City

As with each quarterly report submitted to the funders and posted publicly during the life of SCDSM, we promised to share all lessons learned in full view of our stakeholders. A Shutdown City moniker was applied to the series of events and papers that emanated from within and included,

Mentors - in an era of paid advisory groups and consultants, more than a dozen leaders from within the community answered the call for mentors. The first sixteen individuals below with trusted skills in entrepreneurship, software development, education, marketing, fundraising, investment banking, venture capital, government funding volunteered time and talent to the young companies. That volunteer spirit is multiplied today into hundreds accessible to startups across Iowa.

An industry vertical accelerator - we learned that an all-purpose accelerator was not viable in 2013 Des Moines. However, the region’s strength in financial services, insurance, biotechnology, and agriculture presented opportunities to launch an industry-specific program with corporate investors engaged in the entity. We researched plans for a biotech incubator in Des Moines and an Ag Tech accelerator in the northern suburbs. A brief ultimately led to the creation of the wildly successful Global Insurance Accelerator. An Agtech focused accelerator was also launched in 2017 to complement the GIA’s success but was found duplicative to other more successful regional ag accelerators and decommissioned after four cohorts.

An angel network - Although John Pappajohn’s Equity Dynamics fund was well-established and invested, and Craig Ibsen was making incredible (yet slow in his view) progress toward the State’s first state-focused venture capital fund, there remained a need for a network of high-net worth individuals in the city interested in investing in young companies. I am grateful for six individuals who randomly gathered one afternoon at SCDSM for coffee and formed Plains Angels. Sheldon Ohringer brought deep learning from Colorado to Des Moines, joining JD Geneser and Paul Juffer of UHY, Chris Sackett of Brown Winick Law Firm, Mike Colwell of The Partnership, and Christian as we collectively stewarded the group for its first several months. Plains Angels remains an active investor network in our community.

Gravitate - Geoff Wood asked a poignant question during one of the many shutdown city town halls - where would entrepreneurs convene if SCDSM went away? Answering his own question, he created Gravitate in the Midland Building on 6th and Mulberry (now home to Surety Hotel) before returning to the street level of SCDSM’s physical space. Gravitate remains the core of the city’s entrepreneurial activity!

Corporate Connections - There was much disdain in the shutdown city events for our corporate citizens who, for the most part, had remained disengaged. However, Torey Maerz of Rocket Referrals (now ClientCircle) challenged the room with - “don’t we all (startups) want to sell to corporate clients and some even become the very corporate entities when you grow up? Then let’s work to fix what didn’t work.”

NewBoCo/Iowa Startup Accelerator - Eric Engelmann sat in a corner talking to individuals, 1:1, about the Des Moines startup community during one of our many events. A consummate learner, he sponged the lessons from each person he spoke with, informally and with curiosity. I like to believe that he may have avoided some of our missteps in designing the entrepreneurial ecosystem in Cedar Rapids.

Wins and Losses, Euphoria and Regrets, Experiments and Results

I’ll be brief in this eulogy. Much was learned by the city and the entrepreneurs from the SCDSM experiment. Eleven years later, I have regrets that we didn’t pivot to make something new work. Yet, I know that had we continued, we would’ve broken a cardinal rule learned from the fireside chat with Brad Feld.

It is easy for a community to venerate those who start something disruptive and attract positive attention. Having seen it in other communities he had nurtured personally in Boston and Boulder and others observed from afar, Brad cautioned against a CEO of the startup community. His printed and spoken exhortations asked for startup communities to be led by entrepreneurs with a twenty-year vision. Each twenty-year vision resetting each year to look 20 years ahead. StartupCity in 2013 was the de facto executive office of the startup community and Christian and I had become default CEOs. We needed to step back, and the shutdown made it happen.

The lesson I’ve taken away from the experiment, its results, successes and failures is to not penalize the experimenter when such experiments fail. Although I’d love to delve more into the lesson in a future post, for now, suffice to say that had Debi Durham, Jay Byers, Mike Colwell, Terry Vorbrich, the Polk County Supervisors, Lynn Hicks, Marco Santana, JD Geneser, Chris Sackett, Jason Stone, Connie Wimer or our innumerable supporters chosen to penalize us or disengage with the startup community then, Iowa’s startup community would’ve been forever kneecapped.

We are a thriving community today because they internalized the lessons learned, adopted and adapted new strategies, hired those who understood the long arc of time and investment, and remained vigilant believers.

You, the reader gets to decide if this final story of 2025 is one of ruin or one that laid a concrete foundation for the future.

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I am honored to be a member of another startup community, the Iowa Writers Collaborative. Its voice is led and amplified by another type of entrepreneur - writers, photographers, poets, artists and musicians who contribute their creativity to a global audience. A visit the Iowa Writers Collaborative will be enriching

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